Millennials comprise the generation of individuals born between the early ’80s and early 2000s. This group of individuals grew up with the internet and is comfortable with technology. Millennials are considered to be more/better educated than their predecessors, more ethnically diverse, and more economically active. Yet they are faced with great roadblocks like student debt and the economic uncertainty. As a generation carrying new personal financial responsibility, it is important for Millennials to be on a path leading toward financial security. They need to be aware of their tendencies and find ways of managing them.
Researchers have found that Millennials:
Late on Bills
Millennials have a larger delinquency rate on their bills compared to all other ages. This is a result of a lack of follow up and financial organization. Many young adults expect everything to just happen. However, too few are following up with mail (paper statements or virtual) and then writing checks or setting up online bill pay.
Besides a lack of organization millennials are constantly moving. Changing their address numerous times resulting in their billing address being incorrect. Their bills are being left behind at incorrect/outdated address and collectors simply view it as an missed bill, unaware of the miscommunication. This can result in millennials credit scores being diminished.
Forgetting/Ignoring Student Loans
Many millennials don’t even think they have student loan debt. A recent study from the Brookings Institute found that 14% of students surveyed who were in student loan debt thought they didn’t have any. On top of that, another 28% didn’t think they had Federal student loans – so they didn’t even know what type of loan they received.
This issue also arise from a lack of understanding. Millennials don’t understand what type of debt that have taken on and how/when they owe it by. Failing to understand and recognize student loans millennials are risking their credit scores. This can lead to it being very difficult for them to buy a car, rent an apartment, or even buy a house in the future.
Besides these issues millennials have a different view of the world than previous generations. They want to spend money on experience instead of saving for a future. Sharing all their experience online through social media. They live for the now and want everyone to know about it. They also value convenience more than quality and participate in more online shopping than any other generation.
We need to reach millennials about their money- by teaching them ways to help avoid these common problems among their generations…like fining useful apps. Also, we need to show them how to setup online bill paying because that is what they find convenient and understand. Millennials don’t want to receive paper statements, they don’t want to follow up and track down bills, they want it automated and done through technology. Stay tuned for “Millennials Part 2: Tips and Tools for a Better Financial Future” where will give millennials everything they need to begin their road to financial success.